Investors left in the dark by Hugo Chavez’s battle with cancer are turning to a newspaper gossip columnist for clues about the Venezuelan president’s health and how it will affect his re-election chances.
Nelson Bocaranda, who writes a twice-weekly column in Caracas-based El Universal, revealed last June that Chavez had cancer five days before the self-declared socialist announced doctors in Cuba had removed a tumor from his pelvic area. Bocaranda shocked the nation again on Feb. 20, posting on Twitter that Chavez was secretly in Cuba and needed to undergo further surgery. The unsourced speculation, at first denied by Chavez’s allies, was confirmed by the president a day later.
Chavez, who said in October he was cancer-free following two operations and four rounds of chemotherapy, has refused to say what kind of cancer he has or allow access to his medical records. With his health treated as a state secret, Bocaranda has become essential reading, said Boris Segura, a strategist at Nomura Securities International.
“He’s very well connected, very well informed and you’ve got to read him,” Segura said in a phone interview from New York. “He managed to get sources in Cuba to tell him pretty much what Chavez confirmed afterwards.”
In recent weeks, investors have seized on speculation that Chavez’s health is worse than he is letting on to buy the nation’s bonds, betting that the 57-year-old former paratrooper may be too weak to campaign ahead of October’s presidential election. Opposition candidate Henrique Capriles Radonski has vowed to eliminate policies implemented during Chavez’s 13-year rule that he blames for the world’s fastest inflation, slow growth and shortages of staple foods like milk and flour.
Venezuela’s economy grew 4.2 percent in 2011 following two years of recession while consumer prices climbed 26 percent in January from a year earlier, the fastest pace among 83 economies tracked by Bloomberg.
Chavez departed for Cuba today, waving to supporters through the sun roof of his car as his motorcade made its way down to the airport.
“Cancer or no cancer, rain, thunder or lightning, nothing and no one will be able to stop the new patriotic victory in October 2012,” Chavez said outside the presidential palace before departing. “We are obliged to live and obliged to triumph in order to guarantee Venezuela’s peace.”
Bocaranda’s reports have been helping fuel the bond rally, said Francisco Ghersi, co-managing director of Caracas-based Knossos Asset Management. The yield on Venezuela’s benchmark bonds due 2027 fell 32 basis points to 11.55 percent in less than four hours of trading on the morning of Feb. 21, after Bocaranda said that Chavez was in Cuba with his family.
“This confirmed the fact that Bocaranda’s sources are very accurate,” said Ghersi, who helps manage $8 million, including Venezuelan bonds.
Bocaranda, 66, began his career as a radio news announcer and later worked as a correspondent in New York for Cadena Venezolana de Television, a nationwide broadcaster. He also served as the Foreign Ministry’s press officer to the United Nations.
While abroad he was able to cultivate sources among foreign governments, including the U.S. and Brazil, which he said have proved invaluable in his reporting on Chavez’s health. He also said he has reliable sources in Cuba, though he won’t provide any more details.
“You have to obtain information from abroad because you can’t get it here,” Bocaranda said in an interview from his office at Radio Exitos in Caracas, where he hosts a program for commuting motorists.
Russell Dallen, head bond trader at Caracas Capital Markets in Miami, said he’s been following Bocaranda’s columns for more than 12 years.
“I don’t think it’s his primary motivation, but his insights have helped Venezuelan bonds gain 30 percent since he first revealed Chavez’s illness nine months ago,” Dallen said in an e-mailed response to questions.
With Chavez insisting his illness be treated as a private matter, unsubstantiated rumors about his condition have become a mainstay of Venezuelan blogs. They tend to fizzle out as soon as the president appears on TV tossing around a baseball or, as he did on Jan. 13, delivering a nine-hour speech.
Chavez’s revelation that he needs further surgery confirms reports in the media that his health is worse than he has projected, Barclays Capital analysts Alejandro Arreaza, Alejandro Grisanti and Donato Guarino wrote in a note to clients.
“During the past few months President Chavez has tried to project an image that he has recovered, showing some apparent physical improvement and trying to prove it with greater exposure in the media,” they wrote in the report. “His health condition is weaker than he admitted and the probability he will not run as candidate is bigger than the market is expecting.”
Bocaranda first garnered a following among Venezuelans when he wrote in his column June 25 that Chavez had cancer after biopsies sent to a hospital in Boston were found to be malignant. It took another five days for the president to announce that he had undergone two operations to remove a tumor.
To date, the columnist has amassed more than 500,000 followers on Twitter, 40 percent more than any other journalist in the country, according to Twitteros en Venezuela, a website that ranks users of the micro-blogging site.
His latest scoop came at 2:10 a.m. on Feb. 20, when he posted on Twitter from Miami that Chavez was told he needed another surgery during a video-conference with nine doctors a week earlier. Chavez initially resisted, saying he preferred to campaign for re-election, though he eventually traveled to Cuba for tests with his mother, brother and children before flying back to his home state of Barinas, Bocaranda wrote.
Chavez’s allies quickly denied the report, and Bocaranda never said how he obtained the information. Information Minister Andres Izarra wrote on Twitter that the reports were part of a “dirty war” against the government while National Assembly President Diosdado Cabello said that “when the Comandante appears working, Bocaranda and his team will suffer an intense depression.”
Less than 24 hours later, Chavez confirmed on state TV that he needed another surgery to remove what he described as a probably malignant “lesion” detected during the previously unannounced trip to Cuba.
The president delayed telling Venezuelans about his medical setback so as not to ruin their Carnival weekend, Izarra said on state television Feb. 21. When contacted by Bloomberg News, the Information Ministry declined to comment further, saying Chavez is the only person authorized to talk about his health.
The opposition has called for more transparency from the government, saying the country has a right to be informed about the head of state’s health. Chavez, before heading to Cuba for treatment, called on Venezuelans to be on the lookout for the spreading of rumors and half-truths during his absence.
“If we had to respond to every rumor we’d have to spend all day on it,” Chavez said in a nationwide broadcast yesterday. “They accuse us of hiding things but it’s they who generate doubts and panic.”
While Bocaranda doesn’t hide his sympathies for Venezuela’s opposition, he said his political views don’t interfere with his fact-based reporting on the president’s health, which has also been helped by his wife’s own battle with breast cancer. The government has retaliated by auditing his tax records and imposing fines, he said.
Since first breaking news about Chavez’s cancer, he’s been able to increase his contacts among government officials dismayed by the president’s handling of his illness.
“Many government officials, including high government officials, felt humiliated that they didn’t know what I knew,” Bocaranda said.
With the opposition in a statistical tie with Chavez in polls ahead of the October vote, he expects even more sources fearing for their jobs to come forward, he said.
“Now that they see their situation as more complicated they are building bridges,” he said.